Murphy USA Inc (MUSA)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	832,900	969,100	604,300	560,300	257,300
Interest expense	US$ in thousands	98,500	85,300	82,400	51,200	54,900
Interest coverage		8.46	11.36	7.33	10.94	4.69

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $832,900K ÷ $98,500K
= 8.46

Murphy USA Inc's interest coverage ratio has fluctuated over the past five years, ranging from a low of 5.19 in 2019 to a high of 11.76 in 2022. The interest coverage ratio indicates the company's ability to meet its interest obligations from operating income. Generally, a higher interest coverage ratio is preferable as it suggests that the company is generating enough earnings to cover its interest expenses comfortably.

In 2023, the interest coverage ratio decreased to 8.39 from the previous year's peak of 11.76. Despite the decline, the ratio remains relatively healthy, indicating that Murphy USA Inc continues to generate sufficient earnings to cover its interest expenses. However, investors and creditors may want to monitor future trends in the interest coverage ratio to ensure the company's ability to meet its debt obligations.